Tuesday, January 19, 2010

Opening Day: A Lot Of Square Pegs At A Roundhouse; How To Fit In Tax Hikes & Spending Cuts, Plus: Bill's Legacy, And: Lots More GOP Guv Action 

Sens. Smith & Jennings
Perhaps the most intriguing question of Legislative Session 2010 is whether Dem conservatives in the state Senate will play hardball over spending cuts, but in the final days agree that some form of tax increases are needed to balance the extremely out of balance state budget. (Up to a total $1 billion shortfall for the budget year we are in and the one that starts in July.)

Senate Finance Committee Chairman John "Dr. No" Smith has been talking tough against most tax measures as has Senate President Pro Tem Tim Jennings. But chopping perhaps more than $600 million from the budget for the year that starts July 1st may unleash political forces the two legislative heavyweights may not anticipate.

A blend of major cuts and the $200 million in tax hikes proposed by the Guv and key legislators seems a moderate road to follow. Smith earlier talked sympathetically of raising the gross receipts tax on food, but that's not going anywhere. So will he look elsewhere?

Are Smith and Jennings holding back on supporting any tax increases because they fear they would lose leverage in getting needed spending cuts? Maybe. But if they get the cuts they want, do they then bend and agree to some kind of "revenue enhancement?" How the tax card is played in the Senate will be one of the most anticipated poker hands of the next 30 days.

Have we and others been too optimistic that the tax deal will be an easier part of the legislative equation than the spending cuts? Or are both going to be cause for deadlock and a dreaded special session?


Big Bill will deliver his final state of the state address early this afternoon as the session formally gets underway. You can see it live starting around 1 p.m. on KNME-TV or KOB-TV or watch it streamed on the KOB Web site. Bill says it will be his shortest opening day speech ever. Who wants to talk about bad news for an hour?

Richardson has gone through seven legislative sessions during fat times and has much to show for it, but this session could be the one that most defines his legacy. The economic decline is simply too big to be just be a blip in the history books. Can this Governor collaborate more and dictate less to get the deals that will right the state's listing economic ship?

KOB-TV reported on their interview with Bill on the eve of the session:

The governor stressed one of his legacies is tax cuts during less difficult times .

"Well, you're looking at Bill Richardson, the tax cutter. I've cut a billion dollars in taxes for New Mexicans in my seven years. One billion dollars."

And those tax cuts were quite justifiable when the state was toting up surpluses that are nearly equal to the deficits we now face. Heck, we even argued for larger rebate checks in some of the boom years. But Richardson's critics now say he has been imperiously inflexible in recognizing the new reality in which government is starved for revenue and faces a tax code that has clearly favored the well-off at the expense of the middle classes.

Richardson cant freeze-frame where history judges his legacy. His billion dollars in tax cuts were of their time, now times have changed. Bill's insistence on not rolling back even one iota the 2003 tax cuts for the rich and also not touching even one of the many questionable tax credits on the books threatens to make him look more like a relic of the Clinton 90's than a trend setting leader of the 21st century.


He may have work to do to protect his economic legacy, but the chief executive continues to secure his place in history as one of the nation's leading advocates for human rights. He will again push for domestic partner legislation. If he didn't, most supporters would understand because of the budget crisis, but Big Bill will push ahead despite the Senate repeatedly shutting him out on this one.

The Guv can also take credit for the surprisingly few allegations of civil rights violations we have heard coming out of the state corrections system (knock on wood) and for addressing the Hispanic achievement gap in education.


One of the hot tax topics this session is raising the excise tax on new car sales, currently three percent. If it went to four percent, it would mean an additional $34 million in annual revenue. But lobbyist Randy Traynor has a bone to pick on the tax being called a a "one percent increase." He's right. Raising the excise tax from three to four percent would be an increase in the tax of about 33 percent. That's a stiff boost, but the car dealers still have to make an argument on whey their product is subjected to a much lower tax than the nearly seven percent gross receipts tax on most other transactions.


They are starting to throw the towel in on the Dem US Senate candidate in today's special election in Massachusetts, and if the R there does indeed capture the seat left vacant by Ted Kennedy's death, the Republicans are going to look like a one-eyed cat peeping in a seafood store.

That includes New Mexico where the GOP Guv nomination is going to be worth a lot more if Democratic Massachusetts falls to the R's. Fund-raising may be easier and maybe NM GOP Chairman Harvey Yates might even find some candidates to fill out the lower ballot races like attorney general, secretary of state, auditor and treasurer which all remain vacant. You can't catch a wave, Harvey, unless you're surfing. And right now the R's are beached when it comes to the down ballot action.


Maybe even ABQ congressional candidate Jon Barela could get a second look if Massachusetts topples. He is patiently waiting for the landscape to change, but while he waits incumbent US Dem Rep. Martin Heinrich is preparing. His campaign reports he raised $267,000 in the final quarter of 2009, bringing his grand total to $1.156 million with cash on hand of over $834,000. Heinrich raised $238,000 in the third quarter so his fund-raising kept pace in the holiday quarter. R's are hoping Barela will come with at least $200,000 when reports are filed at the end of the month. He raised about $107,000 in the '09 third quarter, a performance that didn't excite D.C. R's eyeing the contest.

Susan Martinez
GOP Guv contender Susana Martinez joined Dem Diane Denish and fellow Republican hopeful Janice Arnold-Jones in releasing early her fourth quarter financial report. She says she had contributions of about $143,000 and about $20,000 of in-kind contributions, leaving her with about $228,000 cash on hand.

However, there is some spin in the Martinez report that needs to be questioned. She was criticized after her first report for having hardly any contributions from outside the Dona Ana County area where she serves as district attorney. For the latest quarter, she points out that 22 percent of her contributions come from ABQ. However, if you look through the report you will see that nearly all of those ABQ contributions are for only $25. Only a handful are for at least a hundred dollars. (There is one $10,000 contribution from a construction firm.)

The point being that it appears the Martinez campaign went out and picked up a bunch of $25 ABQ contributions--perhaps while she was collecting nominating petition signatures--so she could give the impression that she is more than a regional candidate. But her major contributions remain stacked heavily in Dona Ana County and the oil industry.

She still has a decent chance of getting 20 percent of the delegates at the March pre-primary convention to win a party sanctioned spot on the June ballot, but that's because she is the lone southern GOP contender, not that this is a candidacy that is catching fire statewide.


Reader Bobby Chavarria says the media hasn't been looking closely enough at Martinez's record. Well, it is only January, Bobby. But he sends this link where there are 102 comments pertaining to Susana--both favorable and unfavorable.


Martinez was the only GOP Guv hopeful who did not issue a formal reaction to the Sunday entry of Pete Domenici Jr. in the race (see my Monday blog), but you can be assured her camp isn't happy about it. ABQ State Rep. Janice Arnold-Jones, who our analysts think may be hurt the most by the Domenici entry, had her campaign come with this:

It was especially interesting listening to him highlight his lack of legislative experience. At a time when New Mexico is faced with budgetary problems, pay-to-play politics and a culture of corruption in Santa Fe it is apparent the next governor is going to have to be someone who does not require on the job training.

If you said Pete Jr's candidacy among his GOP rivals was about as welcome as a cockroach in a salad, you would have it just about right.


Then there's those Alligators. Does nothing get past them? Not much. Now they report that Domenici's campaign finance chair, ABQ cigar store owner Larry Monte, has deep Democratic ties. They send state finance records showing Monte, a registered Republican, has given a total of $4,000 in cash and in-kind contributions to Dem lieutenant governor candidate Brian Colon. Monte hosted a cigar party for Colon. Now those are some guys who know how to light a cigar from either end.


A day after entering the race our insiders report Pete Domenici Jr. was on the phone last night with a recorded message for politically active Republicans. We are told he mentioned the service of his father, former US Senator Pete Domenici, gun laws, corruption in state government and family values. It was his first push to secure delegate support at the party's pre-primary convention slated for mid-March. The primary is June 1.

We talked about the Domenici Jr. announcement with KSFR-FM Radio in Santa Fe.

Does it help or hurt GOP Guv hopeful Doug Turner get support at the GOP pre-primary convention to be hanging out with Gary Johnson? You decide:

GOP candidate for Governor Doug Turner and former GOP Governor Gary Johnson will protest new or increased tax proposals at the New Mexico State Capitol Tuesday, January 19. They will be joined by supporters, fellow Republicans and concerned members of the community.

If Turner can motivate libertarian minded Republicans to get to that pre-primary convention leaning on Johnson may help. On the other hand, Gary Johnson's name is not on the ballot, but Doug Turner's is.

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